Monjur Rahman purchased a policy from Fareast Islami Life Insurance Company in 2012, hoping to secure his family’s financial future. When the policy matured in 2022 with a claim of Tk 11.19 lakh, he submitted all the required documentation but has yet to receive any payment.
“When I contacted the company, I encountered repeated delays and obstructions. Even when my father was hospitalised, I requested a partial payment to cover medical expenses, but I still did not receive a single taka,” Rahman said.
Under the Insurance Act 2010, insurers are legally required to settle claims within 90 days of receiving all necessary documents. Despite this, payments to life insurance policyholders continue to face severe delays amid a deepening liquidity crisis in the sector.
In 2023, approximately 10 lakh policyholders were awaiting payouts from 29 companies, amounting to Tk 3,050 crore in unpaid claims. The situation has since worsened. According to the Insurance Development and Regulatory Authority (Idra), nearly 12 lakh policyholders remain unpaid, with 32 life insurers struggling to clear dues. Seven companies have recorded the lowest settlement rates, while total unsettled claims have surged to Tk 4,403 crore as of 2025.
Experts and officials attribute the crisis to financial irregularities, mismanagement, corruption, poor investment strategies, high operational costs, and unhealthy competition. Insurers are now seeking asset sales, loans, and recovery plans to resume payments, all while under significant financial strain and weak regulatory oversight.
Last year, life insurers settled Tk 8,754 crore in claims, covering 66.06% of total filed claims. Settlement rates have dropped from 85% in 2020 to 66.06% in 2025, according to Idra. By comparison, the global average is around 97–98%, and India’s life insurers achieved about 98% in 2022–23.
Life Insurer Settlement Rates (2025)
| Insurer | Claims Reported (Tk crore) | Claims Paid (Tk crore) | Policyholders Waiting (Lakh) | Settlement Rate (%) |
|---|---|---|---|---|
| Fareast Islami Life | 3,442 | 214 | 5.66 | 6 |
| Padma Islami Life | – | – | – | 4 |
| Progressive Life | – | – | – | 21 |
| Golden Life | – | – | – | 11 |
| Sunflower Life | – | – | – | 5.5 |
| Baira Life | – | – | – | 1.6 |
| Akij Takaful Life | – | – | – | 100 |
| Alpha Islami Life | – | – | – | 100 |
| Life Insurance Corporation of Bangladesh | – | – | – | 100 |
| Mercantile Islami Life | – | – | – | 100 |
Fareast Islami Life Insurance, the hardest hit, has seen Tk 2,367 crore embezzled and Tk 432 crore lost to accounting irregularities, including inflated land purchases and loans secured against Mudaraba Term Deposit Receipts (MTDRs). Other companies report similar challenges from past mismanagement and poor investments.
Officials from the affected insurers, including CEOs of Fareast Islami, Baira Life, Golden Life, and Padma Islami Life, cited legacy corruption, fund misappropriation, and liquidity crises as the primary reasons for delayed payments. Many are attempting asset sales or seeking government loans to improve cash flow.
Experts warn that unless regulatory reforms strengthen oversight, consolidate weaker firms, and expand mandatory health coverage, the sector will continue to struggle, leaving hundreds of thousands of policyholders waiting for their rightful claims.